Compulsory peer review ‘rejected’ in Ireland

The 60/40 balance in favour of the Society of Actuaries in Ireland (SAI) compulsory peer review initiative was insufficient to mandate constitutional change and the initiative has therefore failed. After brief recriminations, the real question facing both proponents and opponents of compulsory peer review is what to do next?

‘While the proposed peer review structure cannot be implemented at this time, I am convinced that we do need to strengthen our approach to monitoring compliance’, wrote SAI president Pat Healy to members announcing the ballot result. ‘Throughout the consultation processâ€¦ we have recognised weaknesses in our current structures. Regulators have an expectation of change also and we will have to engage with them in the light of this outcome.’ Mr Healy expressed the hope of returning to the membership on compliance monitoring early in 2004.

The 119 actuaries who voted against compulsory peer review are thought likely to include a substantial general insurance contingent, in that a straw poll at GIRO 2003 suggested that most general insurance actuaries are not in favour of such a development. General insurance actuary Patrick Grealy, whose earlier open letter may have mobilised negative opinion, expressed some satisfaction that compulsory independent review had been rejected but hoped peer review could nevertheless be included in best practice guidance.

Meanwhile the SAI was due to discuss in January the likely future for the appointed actuary system having regard to the outcome of the peer review ballot. Colm Fagan’s presentation poses the question of how the context will have to evolve if it is to sustain a generally positive record of solvency and fair treatment of customers. He concludes that the system at least needs to bolstered by more explicit responsibilities for directors and by better-resourced more proactive supervision.

These developments will be carefully observed by actuaries in the UK, who will hope to learn from Irish efforts to encourage voluntary review and to improve monitoring of actuaries’ work based on much improved disclosure. There may also be lessons to be learned from whatever approach IFSRA (the Irish counterpart to the FSA) takes to enhance supervision of actuarial advice.